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Cash and cash equivalents and Investments. Additional information on the consolidated statements of cash flows | 12 Months Ended
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Dec. 31, 2017
Cash and cash equivalents and Investments. Additional information on the consolidated statements of cash flows |
Cash and cash equivalents and Investments. Additional information on the consolidated statements of cash flows | Note 4 – Cash and cash equivalents and Investments. Additional information on the consolidated statements of cash flows a)Cash and cash equivalents and Investments Cash and cash equivalents and investments consist of the following:
|  | As of December 31, |
Cash and cash equivalents |  | 2017 |  | 2016 |
Cash |  | 52 |  | 56 |
Banks |  | 1,312 |  | 878 |
Time deposits |  | 105 |  | 898 |
Government bonds at amortized cost |  | - |  | 604 |
Other short-term investments |  | 99 |  | 1,509 |
Lebacs at fair value |  | 1,263 |  | - |
Total cash and cash equivalents |  | 2,831 |  | 3,945 |
Investments |  |  |  |  |
Current investments |  |  |  |  |
Government bonds at fair value |  | 371 |  | 1,456 |
Government bonds at fair value – dollar linked |  | 293 |  | - |
Government bonds at amortized cost in foreign currency |  | 149 |  | 3 |
Provincial government and Municipal bonds at amortized cost – dollar linked |  | 30 |  | 13 |
Provincial government and Municipal bonds at amortized cost in foreign currency |  | 33 |  | - |
Provincial government and Municipal bonds at amortized cost |  | 8 |  | 9 |
Other short-term investments |  | 2,433 |  | 270 |
Lebacs at fair value |  | 109 |  | - |
Total current investments |  | 3,426 |  | 1,751 |
Non-current investments |  |  |  |  |
Government bonds at amortized cost in foreign currency |  | 2,228 |  | 255 |
Provincial government and Municipal bonds at amortized cost – dollar linked |  | 42 |  | 61 |
Provincial government and Municipal bonds at amortized cost |  | - |  | 8 |
Provincial government and Municipal bonds at amortized cost in foreign currency |  | 386 |  | - |
Tuves Paraguay S.A. shares purchase option |  | - |  | 22 |
2003 Telecommunications Fund |  | 1 |  | 1 |
Total non-current investments |  | 2,657 |  | 347 |
b)Additional information on the consolidated statements of cash flows The Company applies the indirect method to reconcile the net income for the year with the cash flows generated by its operations. For purposes of the statements of cash flows, cash and cash equivalents comprise cash, bank current accounts and short-term highly liquid investments (with a maturity of three months or less from the date of acquisition). Bank overdrafts are disclosed in the statement of financial position as financial debts. During 2017, 2016 and 2015 bank overdrafts have been part of the permanent short-term financing structure of Personal, so, net funds requests under that method (with maturities less than three months) are included in financing activities. Additional information on the breakdown of the net cash flow provided by operating activities is given below:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Collections |  |  |  |  |  |  |
Collections from customers |  | 71,113 |  | 55,928 |  | 41,930 |
Interests from customers |  | 762 |  | 366 |  | 182 |
Interests from investments |  | 670 |  | 59 |  | 190 |
Mobile operators collections |  | 1,282 |  | 885 |  | 843 |
Subtotal |  | 73,827 |  | 57,238 |  | 43,145 |
Payments |  |  |  |  |  |  |
For the acquisition of goods and services and others |  | (19,557) |  | (17,120) |  | (12,784) |
For the acquisition of inventories |  | (5,520) |  | (5,383) |  | (6,343) |
Salaries and social security payables and severance payments |  | (11,669) |  | (9,113) |  | (6,885) |
CPP payments |  | (1,132) |  | (393) |  | (413) |
Income taxes (include tax returns and payments in advance) |  | (2,400) |  | (1,700) |  | (1,631) |
Other taxes and taxes and fees with the Regulatory Authority |  | (13,399) |  | (10,731) |  | (7,775) |
Foreign currency exchange differences related to the payments to suppliers |  | (818) |  | (1,433) |  | (502) |
Inventory suppliers |  | (269) |  | (295) |  | (182) |
PP&E suppliers |  | (425) |  | (1,467) |  | (188) |
Other suppliers |  | (119) |  | (144) |  | (31) |
NDF |  | (5) |  | 473 |  | (101) |
Subtotal |  | (54,495) |  | (45,873) |  | (36,333) |
Net cash flow provided by operating activities |  | 19,332 |  | 11,365 |  | 6,812 |
Changes in assets/liabilities components:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Net decrease (increase) in assets |  |  |  |  |  |  |
Trade receivables |  | (2,072) |  | (2,773) |  | (2,364) |
Other receivables |  | (902) |  | 276 |  | (754) |
Inventories |  | (618) |  | 837 |  | (1,522) |
|  | (3,592) |  | (1,660) |  | (4,640) |
Net increase (decrease) in liabilities |  |  |  |  |  |  |
Trade payables |  | 1,067 |  | (1,391) |  | 1,368 |
Deferred revenues |  | 51 |  | (58) |  | (48) |
Salaries and social security payables |  | 513 |  | 369 |  | 221 |
Other taxes payables |  | 982 |  | 13 |  | 483 |
Other liabilities |  | 68 |  | 62 |  | 29 |
Provisions (Note 17) |  | (360) |  | (174) |  | (163) |
|  | 2,321 |  | (1,179) |  | 1,890 |
Main non-cash operating transactions:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Offsetting of capitalized trade receivables of Tuves Paraguay acquisition |  | 149 |  | - |  | - |
Offsetting of tax on personal property – on behalf of Shareholders |  | - |  | 8 |  | 15 |
Income tax offset with VAT and internal taxes |  | - |  | - |  | 50 |
Offsetting of other receivables with regulatory provisions |  | 1 |  | 27 |  | - |
VAT offset with income tax payments |  | - |  | 54 |  | - |
SAC acquisitions offset with trade receivables |  | 313 |  | 305 |  | 212 |
Other receivables of PP&E sales offset with trade payables |  | - |  | 25 |  | - |
Most significant investing activities: Fixed assets acquisitions include:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
CAPEX (Note 8) |  | (9,905) |  | (9,632) |  | (6,396) |
Acquisition of Materials (net transfers to CAPEX, Note 8) |  | (1,433) |  | (474) |  | (1,062) |
Subtotal |  | (11,338) |  | (10,106) |  | (7,458) |
Plus: |  |  |  |  |  |  |
Payments of trade payables originated in prior years acquisitions |  | (3,342) |  | (4,832) |  | (1,367) |
Less: |  |  |  |  |  |  |
Acquisition of fixed assets through incurrence of trade payables |  | 3,862 |  | 5,298 |  | 3,592 |
Assets retirement obligations |  | 35 |  | 45 |  | 53 |
Mobile handsets lent to customers at no cost (i) |  | 56 |  | 54 |  | 32 |
|  | (10,727) |  | (9,541) |  | (5,148) |
| (i) |  | Under certain circumstances, Personal and Núcleo lend handsets to customers at no cost pursuant to term agreements. Handsets remain the property of the companies and customers are generally obligated to return them at the end of the respective agreements.
Intangible assets acquisitions include:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Acquisition of licenses 3G and 4G |  | - |  | - |  | (2,256) |
Other intangible assets acquisitions (Note 9) |  | (1,238) |  | (1,754) |  | (1,448) |
Plus: |  |  |  |  |  |  |
Payments of trade payables originated in prior years acquisitions |  | (93) |  | (201) |  | (116) |
SAC acquisition offset with trade receivables |  | (313) |  | (305) |  | (212) |
Less: |  |  |  |  |  |  |
Acquisition of intangible assets through incurrence of trade payables |  | 673 |  | 462 |  | 466 |
|  | (971) |  | (1,798) |  | (1,310) |
The following table presents the cash flows from purchases, sales and maturities of securities which were not considered cash equivalents in the statement of cash flows:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Government bonds acquisition |  | (3,002) |  | (971) |  | (1,049) |
Sales of Government bonds |  | 1,986 |  | 1,051 |  | - |
Government bonds collection |  | 276 |  | 165 |  | 45 |
Other short-term investments and time deposits |  | (2,063) |  | (265) |  | - |
Sales of Other short-term investments |  | 176 |  | - |  | - |
Argentine companies notes collection |  | - |  | - |  | 28 |
|  | (2,627) |  | (20) |  | (976) |
Financing activities components: The following table presents the financing activities components of the consolidated statements of cash flows:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Bank overdrafts |  | - |  | 1,344 |  | 3,150 |
Notes |  | - |  | 1,869 |  | 716 |
Bank loans |  | 1 ,730 |  | 6,124 |  | 435 |
Total financial debt proceeds |  | 1,730 |  | 9,337 |  | 4,301 |
Bank overdrafts |  | (1,572) |  | (2,793) |  | - |
Notes |  | (566) |  | - |  | - |
Bank loans |  | (848) |  | (143) |  | (31) |
Total payment of debt |  | (2,986) |  | (2,936) |  | (31) |
Bank overdrafts |  | (58) |  | (1,243) |  | (405) |
Interests on Notes and related expenses |  | (340) |  | (205) |  | (3) |
Interests on bank loans and related expenses |  | (418) |  | (125) |  | (63) |
NDF |  | (32) |  | - |  | - |
Total payment of interest and related expenses |  | (848) |  | (1,573) |  | (471) |
Dividends paid by company breakdown are as follows:
|  | Years ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Núcleo to ABC Telecomunicaciones |  | (38) |  | - |  | (45) |
Telecom Argentina |  | (4,151) |  | (2,000) |  | (804) |
Dividends advance declared by Sofora and paid by Telecom in December 2017 |  | (3) |  | - |  | - |
|  | (4,192) |  | (2,000) |  | (849) |
Telecom Argentina’s Dividends Distribution Fiscal year 2017 The Company’s Board of Directors’ Meeting held on December 18, 2017, resolved in exercise of the powers delegated by the Ordinary Shareholders’ Meeting held on the same date, to allocate $4,150.3 (equivalent to $4.28 pesos per outstanding share) from the “Voluntary reserve for future dividends payments” to a cash dividend distribution that was available to shareholders as from December 29, 2017. Fiscal year 2016 The Company’s Board of Directors’ Meeting held on April 29, 2016, resolved to allocate $2,000 (equivalent to $2.06 pesos per outstanding share) of the “Voluntary reserve for future dividends payments” to a cash dividend distribution in two installments: $700 that was available to shareholders as from May 13, 2016 and $1,300 that was available to shareholders since August 26, 2016. Fiscal year 2015 The Company’s Ordinary Shareholders’ Meeting held on April 29, 2015, approved the payment of cash dividends of $804 (equivalent to $0.83 pesos per outstanding share), which was made available to shareholders on May 11, 2015. Advance of dividends declared by Sofora and paid by Telecom On December 29, 2017, Telecom Argentina as surviving company of the merger, paid the pending advance of dividends of $2.9 declared by Sofora in its Board of Directors’ meeting held on November 29, 2017. Núcleo’s Dividends Distribution Fiscal year 2017 Núcleo’s shareholders, at their meeting held on March 28, 2017, approved the distribution of cash dividends for an amount equivalent to $109 (that correspond to 40,000 million of Guaraníes translated to argentine pesos at the exchange rate of the approval day), with the following schedule of payments:
Month of dividends payments |  | Dividends corresponding to Personal |  | Dividends corresponding to non- controlling shareholders |  | Total |
May 2017 (*) |  | 37 |  | 17 |  | 54 |
October 2017 (**) |  | 37 |  | 18 |  | 55 |
Total |  | 74 |  | 35 |  | 109 |
(*) As of the payment date, the amounts were 39 and 18, respectively. (**) As of the payment date, the amounts were 41 and 20, respectively. Fiscal year 2015 Núcleo’s shareholders, at their meeting held on March 26, 2015, approved the distribution of cash dividends for an amount equivalent to $63 (that correspond to 35,000 million of Guaraníes translated to argentine pesos at the exchange rate of the approval day), with the following schedule of payments: The Ordinary Shareholders’ Meeting also delegate in Nucleo’s Board of Directors the possibility and opportunity of distribution of a second cash dividends for an amount of up to 35,000 million of Guaraníes (equivalent to approximately $80). Finally, the Board of Directors, at their meeting held on December 17, 2015, approved the distribution of cash dividends for an amount $80 (that correspond to 35,000 million of Guaraníes translated to argentine pesos at the exchange rate of the approval day). According to this, the total dividends amount paid during 2015 was as follows:
Month of dividends payment |  | Dividends corresponding to Personal |  | Dividends corresponding to non- controlling shareholders – ABC Telecomunicaciones |  | Total |
May 2015 (*) |  | 42 |  | 21 |  | 63 |
December 2015 (**) |  | 54 |  | 26 |  | 80 |
Total |  | 96 |  | 47 |  | 143 |
(*) As of the payment date, the amounts were 41 and 19, respectively. (**)As of the payment date, the amounts were 52 and 26, respectively. Additional information required by IAS 7 In January 2016, IAS 7 was amended through the incorporation of paragraphs 44A to 44E. This amendment included additional information requirements that allow financial statements’ users to assess changes in liabilities generated by financing activities. Reconciliation between the opening and closing balances of liabilities generated by financing activities is disclosed below.
|  | Balances as of December 31, 2016 |  | Transfers |  | Cash Flows |  | Accrued interests |  | Exchange differences and currency translation adjustments |  | Balances as of December 31, 2017 |
Bank overdrafts |  | 1,707 |  | - |  | (1,572) |  | - |  | - |  | 135 |
Bank loans – principal |  | 7,401 |  | (1,092) |  | 882 |  | 11 |  | 992 |  | 8,194 |
Notes – principal |  | 2,650 |  | (57) |  | (566) |  | - |  | 131 |  | 2,158 |
NDF |  | 2 |  | - |  | (32) |  | 37 |  | 10 |  | 17 |
Accrued interests |  | 152 |  | 1,149 |  | (816) |  | 880 |  | 366 |  | 1,731 |
Total current financial debt (Note 12) |  | 11,912 |  | - |  | (a) (2,104) |  | 928 |  | 1,499 |  | 12,235 |
| (a) |  | Correspond to $1,730 of debt proceeds, $2,986 of principal payments and $848 of interest payments.

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